All posts tagged ICBC

In its first foray into the U.S. market, the world’s largest bank has gone for a quiet start.

Industrial & Commercial Bank of China Ltd. has agreed to buy an 80% stake in Bank of East Asia Ltd.’s U.S. subsidiary, The Wall Street Journal reports. Bank of East Asia doesn’t break out the value of its U.S. assets in its balance sheet, but the report says the deal is worth some US$140 million. Bank of East Asia has 13 branches in the U.S. in California and New York.

It’s a no-brainer for both parties, who already have a working relationship after ICBC acquired a 70% stake in Bank of East Asia’s Canadian operations. Bank of East Asia booked a gain of HK$230 million (US$29.4 million) in that deal. Its six branches have since been rebranded ICBC Canada.

Bank of East Asia, which has made China the main focus of its operations, should be happy to find a willing buyer for its U.S. operations. These have continued to suffer from the aftermath of the subprime crisis. In its interim results last year, the Hong Kong lender said Bank of East Asia (U.S.A.) N.A. saw its impaired-loan ratio rise as it disposed of some loans. The parent’s overseas operations excluding China, which also include businesses in the U.K. and Southeast Asia, recorded an operating profit of HK$50 million after an impairment loss of HK$126 million as of June 30 2010.

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